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Industrial development agencies reported they supported 4,577 projects and provided nearly half a billion dollars in net tax exemptions in fiscal year 2009, for a cumulative gain of 204,000 jobs over the life of the projects assisted, according to a report examining the performance of IDAs released last week by state Comptroller Thomas DiNapoli.
“For four years, I’ve called on IDAs to improve the accuracy of the jobs data,” DiNapoli said in a release. “Taxpayers should know if the projects they’re paying for are creating the jobs that were promised. Year after year, we’ve had serious questions about the effectiveness of IDAs. We need to make sure the tax breaks given for these projects are promoting job retention and growth.”
This is the fourth annual DiNapoli report examining the performance of the state’s IDAs. The report analyzes the aggregate net tax exemptions provided by IDAs in each county compared to the aggregate property tax levy for each county and the total job gains or losses by the county.
The report found no apparent connection between higher tax exemptions and job growth.
DiNapoli noted while there has been some improvement in the quality of the reports submitted by IDAs, shortfalls on the job data continue to impede the ability to evaluate their effectiveness.
To improve the overall effectiveness of the state’s 115 IDAs, DiNapoli made four recommendations:
•Improve transparency of IDA operations. Publish an annual report card, with detailed information on individual projects, such as job performance data and tax exemptions;
•Improve accuracy of jobs data. IDAs should require that project developers sign a uniform project agreement that contains provisions that compel the accurate disclosure of employment information;
•Ensure projects are likely to meet economic goals. Utilize uniform applications for projects and adopt objective project evaluation and selection criteria; and
•Require repayment of benefits if economic goals are not met. Include a “clawback” provision in project agreements that allow IDAs to recapture benefits if employment or other goals are not met.
“The Herkimer County IDA, in response to comments made by the state Comptroller’s Office and at the request of the agency’s board of directors, has put many of the recommendations made by the state comptroller in place,” Herkimer County IDA Executive Director Mark Feane said in a telephone interview on Monday. “Many of the comptroller’s recommendations have been in place for a number of years, because our board agrees there is a need for this kind of reporting because these projects involve tax dollars and the taxpayers have a right to know how their money is being utilized.”
“Reviews like this are a positive because they highlight what your agency is doing right and pinpoint areas where your agency can improve,” Herkimer County IDA Board of Directors Chairman John Piseck said in a telephone interview on Monday. “Remington Arms, Granny’s Kitchens, Schuyler Wood Pellet are all examples of the effectiveness of our agency, and there are even more success stories that could be shared. Granny’s Kitchens employed 43 people in 1999. They received incentives for a promise to grow 11 jobs and now they employ 330 people. That’s a success story. Remington Arms seemingly puts out a new job request every week. That’s a success story. The Herkimer County IDA is doing things right and I believe the state comptroller’s review of our operations shows that.”
One area Feane said he does not agree with the comptroller is in the area of offering tax breaks and incentives to corporations, as he said he feels they are necessary to attract business and investment.
“With the cost of doing business what it is and with others offering tax breaks and incentives, it’s virtually impossible for the IDA to operate without them,” said Feane. “Often times they are the difference in bringing in company and their 100 jobs or losing them to another county or state. More often than not, the companies that are offered incentives exceed their numbers in terms of jobs promised. If the playing field were equal incentives wouldn’t be necessary, but the field is not equal.”
To see the report, visit www.osc.state.ny.us/localgov/pubs/research/idaperformance2011.pdf.
Industrial development agencies reported they supported 4,577 projects and provided nearly half a billion dollars in net tax exemptions in fiscal year 2009, for a cumulative gain of 204,000 jobs over the life of the projects assisted, according to a report examining the performance of IDAs released last week by state Comptroller Thomas DiNapoli.
“For four years, I’ve called on IDAs to improve the accuracy of the jobs data,” DiNapoli said in a release. “Taxpayers should know if the projects they’re paying for are creating the jobs that were promised. Year after year, we’ve had serious questions about the effectiveness of IDAs. We need to make sure the tax breaks given for these projects are promoting job retention and growth.”
This is the fourth annual DiNapoli report examining the performance of the state’s IDAs. The report analyzes the aggregate net tax exemptions provided by IDAs in each county compared to the aggregate property tax levy for each county and the total job gains or losses by the county.
The report found no apparent connection between higher tax exemptions and job growth.
DiNapoli noted while there has been some improvement in the quality of the reports submitted by IDAs, shortfalls on the job data continue to impede the ability to evaluate their effectiveness.
To improve the overall effectiveness of the state’s 115 IDAs, DiNapoli made four recommendations:
•Improve transparency of IDA operations. Publish an annual report card, with detailed information on individual projects, such as job performance data and tax exemptions;
•Improve accuracy of jobs data. IDAs should require that project developers sign a uniform project agreement that contains provisions that compel the accurate disclosure of employment information;
•Ensure projects are likely to meet economic goals. Utilize uniform applications for projects and adopt objective project evaluation and selection criteria; and
•Require repayment of benefits if economic goals are not met. Include a “clawback” provision in project agreements that allow IDAs to recapture benefits if employment or other goals are not met.
“The Herkimer County IDA, in response to comments made by the state Comptroller’s Office and at the request of the agency’s board of directors, has put many of the recommendations made by the state comptroller in place,” Herkimer County IDA Executive Director Mark Feane said in a telephone interview on Monday. “Many of the comptroller’s recommendations have been in place for a number of years, because our board agrees there is a need for this kind of reporting because these projects involve tax dollars and the taxpayers have a right to know how their money is being utilized.”
“Reviews like this are a positive because they highlight what your agency is doing right and pinpoint areas where your agency can improve,” Herkimer County IDA Board of Directors Chairman John Piseck said in a telephone interview on Monday. “Remington Arms, Granny’s Kitchens, Schuyler Wood Pellet are all examples of the effectiveness of our agency, and there are even more success stories that could be shared. Granny’s Kitchens employed 43 people in 1999. They received incentives for a promise to grow 11 jobs and now they employ 330 people. That’s a success story. Remington Arms seemingly puts out a new job request every week. That’s a success story. The Herkimer County IDA is doing things right and I believe the state comptroller’s review of our operations shows that.”
One area Feane said he does not agree with the comptroller is in the area of offering tax breaks and incentives to corporations, as he said he feels they are necessary to attract business and investment.
“With the cost of doing business what it is and with others offering tax breaks and incentives, it’s virtually impossible for the IDA to operate without them,” said Feane. “Often times they are the difference in bringing in company and their 100 jobs or losing them to another county or state. More often than not, the companies that are offered incentives exceed their numbers in terms of jobs promised. If the playing field were equal incentives wouldn’t be necessary, but the field is not equal.”
To see the report, visit www.osc.state.ny.us/localgov/pubs/research/idaperformance2011.pdf.
